Under the dome: what is Australia's climate policy?

Adam Morton

Remarkable things are happening in the endless argument over how to respond to human-made climate change. Perhaps the most remarkable is the extent to which voters are being left to guess which policies their elected representatives will support and which they will abandon.

In April, coal-miner-turned-MP Clive Palmer boldly told the ABC that, no, he did not believe the scientific consensus that global warming was a problem. On Thursday, he launched a renewable energy report with former Liberal leader John Hewson - an event that would have been extraordinary three weeks ago, but was relatively mundane in the wake of Palmer's night of climate kinship with Al Gore.

Perhaps in acknowledgement, Palmer upped the wattage, declaring that we stand "at the edge of time for an appointment with destiny" where fighting climate sceptics would remain a constant battle. Such is the pace of change in the political climate, no-one blinked.

Whatever is driving Palmer's transformation, it puts everything around him in the shade. It managed to relegate to supporting act the revelation that Ricky Muir - a car lover turned novice senator – had stepped in to save more than a billion dollars of spending on clean technology research and development.

Internationally, the most remarkable recent shift has been President Barack Obama bypassing Congress to force the states to cut their electricity emissions through EPA regulation. The goal – an overall 30 per cent cut below 2005 levels by 2030 - sounds bigger than it is, but is significant in that it is likely to prompt several more states to join the 10 that currently have carbon trading schemes.

China - cast as the villain after the failure of the 2009 Copenhagen climate conference - has started seven pilot trading schemes of varying quality in the past year. Prices range from about $4 to $12. A national scheme is expected before the decade is out.

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The embattled Europeans' trading scheme is selling pollution permits at about $8 a tonne, waiting for other countries to join it. A South Korean scheme starts next year. Canada and Japan have regional schemes, but little happening nationally.

It doesn't add up to a simple narrative, but the trajectory is unmistakably in one direction. And Australia? Though nothing in this brave new Senate is certain, the carbon price is likely to go sooner rather than later. It will be quite an achievement, making Australia the first country to axe a carbon price. While regularly described as the world's biggest carbon tax, a World Bank list found eight jurisdictions with prices higher that Australia's $25.40.

Due to the Senate's intervention, Australia is likely to be left with a handful of clean energy policies designed to promote new technologies, but not drive emissions cuts. They are worthwhile measures, but will deliver only a fraction of the promised 5 per cent cut below 2000 levels by 2020. Tony Abbott would like to get rid of most of them.

The government's alternative to carbon pricing, direct action, would allow businesses to opt in to get paid to deliver emissions cuts. How it would be enforced remains unclear - no business would be forced to make cuts, and the government is yet to explain how it would make sure some did not just increase emissions and cancel out the cuts it bought.

It could still pass the Senate. Labor will likely have to decide whether to vote it down and allow itself to be blamed when there is no carbon policy, or pass the scheme and leave the Coalition to carry the can if it fails. This issue is complicated by Palmer's latest position: that his party could reverse its opposition to direct action if the government accepts an amendment for an emissions trading scheme that would lie dormant until other countries were doing more. If, after the carbon price is repealed, this idea were to win Labor and Greens support it could leave Abbott a tricky choice.

The Coalition's election position was that it would review its climate policy in 2015, considering what is happening internationally. A dormant trading scheme is consistent with this. Depending on design, it is a plan that could win the support of key business groups. Abbott could still say he was axing the tax and introducing direct action.

This assumes that the Coalition thinks having a carbon policy matters. Abbott used to be openly sceptical about climate science. Now he talks of taking "prudent" action, but the veneer is thin. His decision to appoint climate sceptics to head his business advisory council and to review the renewable energy target is just one example where his actions speak loudly.

Abbott is entitled to his views. Voters are entitled to be clearly told what his views are and to compare them with what major scientific and economic bodies have to say on the subject. It could be that the PM has to choose between a compromise that would keep carbon pricing alive and coming clean with voters that he is fine with Australia having no climate policy at all.

Adam Morton is The Age's Society and Science news editor. He is a former environment editor